G-III Apparel Group, Ltd. (NASDAQ:GIII) Q3 2020 Earnings Conference Call - Final Transcript

Dec 04, 2019 • 08:30 am ET


G-III Apparel Group, Ltd. (NASDAQ:GIII) Q3 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript

Q & A

Thank you. [Operator Instructions] Our first question comes from Edward Yruma from KeyBanc Capital. Your line is now open.

Edward Yruma

Hey, good morning guys, and thanks for taking the question. One quick housekeeping question and a bigger picture question. I guess first on housekeeping. What were the retail losses in the quarter and kind of what are the losses expected in the fourth quarter. And on tariffs, did that include the adoption of 4B on the 15th. And then Morris kind of a broader question, we see some nice momentum in CK Denim, how long do you think it will take for a larger rollout of that business and what other opportunities do you see kind of in the three to five year time frame as other categories you could look at? Thanks so much.

Neal S. Nackman

Yeah, so Ed on the housekeeping items, the retail loss is similar to the prior year's loss. Turning to the fourth quarter we actually expect to incur a loss in the retail segment as opposed to the prior year. We actually had a gain. With respect to the tariffs primarily the tariffs that were incorporated that were effective September 1st captured really all of our categories and that was rolled into our previous year's adjusted, previous quarter's adjusted guidance we talked about a $12 million impact net of then the support to G-III as a result of those tariffs.

Morris Goldfarb

And in response to CK Denim, the jeans part of it. We're going to hit our strides very quickly. Product is now being shipped. The response for the last couple of weeks has been good. There is a category or two that we're going to work on improving, but we are more than pleased as to the response that we've gotten.

These store orders are significant. We have all the distribution we want for the early stage of shipping, and we believe that the number that I stated earlier in the commentary, which is $250 million of business is not far away that could possibly be achieved within the next three to four years. You should recognize that when we took this on, this was not exactly a continuation of successful category.

We had a back step and we had to clear the inventory that was or the retail had to clear the inventory that was in the system. And we got them incredibly excited about the future of this category. So as far as you had a follow-up, which I guess is relates to other categories or maybe the better answer to you classification extensions. We have most categories, the women's side of it where we don't seem to have peaked out in any one of them. So we show growth every year and what could possibly be one of the -- it is certainly one of the largest wholesale distributed brands on the women's side in North America. It doesn't shows signs of tiring. We have -- we're showing approximately 10% or 11% growth in scale